The effect of Covid-19 pandemic on FDI inflows in Vietnam: Empirical evidence

Abstract

FDI inflows significantly contribute to promoting economic development and growth and creating more jobs in Vietnam. Attracting more FDI inflows has become one of Vietnam’s priority policies to solve the problem of lack of capital for development. Does the Covid-19 pandemic reduce FDI inflows to Vietnam? For the answer, the study analyses and investigates the effect of the Covid-19 pandemic on FDI inflows in Vietnam from January 2020 to October 2021 using the instrumental variable estimator and the OLS regression. The results indicate that the Covid-19 diseases decrease FDI inflows. Furthermore, economic growth, trade openness, and inflation are determinants of FDI inflows. The findings in this study suggest some policy implications relating to FDI inflows in the period of the Covid-19 pandemic.